Transparency watchdog says EU remains vulnerable to corruption

OLAF, Council, and Commission taken to task over Dalligate investigation

John Dalli was forced to resign as commissioner in 2012
John Dalli was forced to resign as commissioner in 2012
The report identified the following areas as key sources of potential foul play

Decision making Complex law-making procedures and murky negotiations, such as the so-called trialogues – informal meetings of representatives from different institutions- are opaque

Lobbying No information is made public on industry or other interests influencing EU decisions

Conflicts of interest EU institutions suffer from the so-called “revolving-door risk,” meaning officials move to the private sector after leaving EU office. The report says that, while members of the European Parliament and European Commissioners disclose their assets, TI found no evidence of subsequent checks to verify them

Whistle-blowing With the exception of the European Commission, the EU’s executive arm, no other institution has effective whistle-blowing rules. These could guarantee that people who witness misconduct or unethical behavior are protected if they come forward

Monitoring The report pointed out a lack of independent bodies to oversee how senior EU decision-makers comply with ethics rules. Many of the bodies that do exist include current or former policymakers

Transparency International report

The resignation of former European Commissioner John Dalli in 2012 has featured extensively in a report [PDF] by international corruption watchdog Transparency International (TI), which has highlighted various ethical black holes inside the European Union’s various institutions.

TI said the EU institutions were vulnerable to corruption due to loopholes and poor enforcement of rules on ethics, transparency and financial control.

In the case of Dalli’s resignation, TI said that while the allegations of bribery by Swedish Match against the commissioner and a Maltese acquaintance triggered an OLAF investigation and saw EC president José Manuel Barroso exercising his legal power to compel a resignation, “the affair also highlights the lack of clear and transparent procedures for the exercise of the President’s power to compel a Commissioner to resign.”

Dalli was forced to resign in October 2012 on the strength of the covering letter to OLAF’s investigative report, which had not yet been investigated by the Maltese attorney general. Dalli has contested the resignation in a case he instituted against Barroso in the European Court of Justice.

TI also highlighted the lack of ethicality in appointing a lobbyist for the tobacco industry, Michel Petite, who had previously served as head of the European Commission’s legal services, to an ad hoc ethical committee on Commissioners’ ethics and conflicts of interest.

Petite had communicated the Swedish Match allegations to EC secretary-general Catherine Day, sparking off the OLAF investigation into John Dalli. But it was only six months after Dalli resigned, that it emerged that OLAF had never found conclusive evidence that the commissioner was aware of an alleged bribe.

TI also said that doubts over the integrity procedures relating to the EU’s general secretariat council were raised, when MaltaToday revealed that Gayle Kimberley – a lobbyist employed by Swedish Match and identified by OLAF as a possible bribery accomplice – was kept on as an employee of the European Council’s secretariat.

The report also found problems with the main watchdog for the union’s institutions, the European Anti-Fraud Office, for not acting transparently during its investigation of Dalli and, more generally, for being too cosy with administrators at the European Commission.

In a 250-page report, Transparency International recommends tightening regulation of lobbying, reducing conflicts of interest, enhancing protection for whistle-blowers and curbing secret deal-making in sensitive policy areas like financial services.

It said the weak enforcement of the existing rules means that “corruption risks persist at EU level.”

The Parliament, the only directly elected institution in the European Union, was the subject of particularly tough criticism by Transparency International, which cited a lack of cooperation by the lawmakers while it gathered research from June 2013 to February 2014.

One of the most common problems identified in the report is a form of lawmaking that takes place behind closed doors, called trilogues, in which a handful of representatives from European governments, the European Commission and the Parliament hash out compromises on legislation,, often in sensitive policy areas like regulating car emissions and using taxpayer money to bail out banks.

Those meetings are among a number of “blind spots” where public scrutiny is extremely limited and where negotiating positions taken by the Parliament were susceptible “to external – and unseen – influence by interest groups and member state pressure,” the report said. It recommended that all documents from those meetings, and from other meetings of European Union experts, be made publicly accessible.

More in Dalligate